On May 9, 2023, a petition was filed with the Supreme Court of Illinois by Jerome Larkin, Administrator of the Attorney Registration and Disciplinary Commission (ARDC), pursuant to Supreme Court Rule 762(a). The Petition charged Scanlon with converting more than $88,000 in funds from a client, Victor M. Betancourt, and a lienholder, the State of Illinois, in violation of the Illinois Rules of Professional Conduct for Attorneys.
According to the petition, Scanlon was currently suspended from the practice of law in Missouri and was registered to practice law in Illinois. Scanlon maintained a client trust account at Jefferson Bank & Trust Company/First Mid Bank & Trust. The petition alleged that on October 26, 2013, the client had been seriously injured in a fall from a structure he had been working on at premises owned by Michael Pederson, located in O’Fallon, Illinois. Scanlon had agreed to represent the Client in pursuing a personal injury claim against Pederson and Menard Incorporated, and the parties had agreed to try to resolve the case through mediation.
The petition further alleged that on November 7, 2018, Scanlon had voluntarily dismissed, without prejudice, all counts against Menard, Incorporated, leaving Pederson as the sole defendant. The parties had subsequently agreed to mediate the case, and on September 26, 2019, the parties had agreed that Pederson’s insurance carrier, United States Automobile Association (the “Insurer”), would pay the client a total of $150,000 in exchange for his execution of a release of his claims against Pederson and a dismissal, with prejudice, of Pederson from the lawsuit.
The petition alleged that on October 2, 2019, Scanlon had met with the client and obtained his signature on a release of all claims supplied to him by counsel representing Pederson. Scanlon had forwarded the executed release to counsel representing Pederson and had stated that he would send an executed stipulation for dismissal of the lawsuit upon receipt of the Insurer’s settlement checks.
The petition further alleged that Scanlon had received two checks: one check had been the Insurer’s check number 0026578021, in the amount of $145,000, and the other check had been the Insurer’s check number 0026561896, in the amount of $5,000. Both checks had been made payable to “Charles R. Scanlon, Attorney at Law, and Victor M. Betancourt.” Shortly after receiving the checks, Scanlon met with the client to have him endorse the two settlement checks. The client had endorsed the checks, as had Scanlon. On October 8, 2019, Scanlon deposited the Insurer’s check number 0026561896, in the amount of $5,000, into the Trust Account. On October 9, 2019, Scanlon deposited the Insurer’s check number 0026578021, in the amount of $145,000, into the Trust Account. Following those deposits, the balance of the Trust Account had been $150,016.73.
The petition alleged that Scanlon had had a contractual claim to his attorney’s fee of $50,000, plus reimbursement of his costs, and that the remainder of the settlement proceeds had been due to the client and the State. However, as of the filing of the petition, Scanlon had not paid either the client or the state any of the proceeds from the settlement.